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TOKYO (Reuters) - Tokyo Electric Power Co (9501.T) (TEPCO)
and Kansai Electric Power Co (9503.T), Japan's two biggest
utilities, forecast on Monday record losses for this business
year due to soaring energy prices.

TEPCO's earnings have been hit hard since a powerful
earthquake last July forced it to indefinitely halt operations
at its Kashiwazaki-Kariwa nuclear plant in northern Japan.

The closure of the plant, which accounts for about 13
percent of TEPCO's total power capability, has prompted it to
increase purchases of crude and fuel oil to work its thermal
plants harder as well as buy electricity from other firms.

The utility said it expects the plant shutdown to increase
its fuel and electricity purchase costs by over 700 billion yen
this fiscal year.

TEPCO said it expects a group net loss of 280 billion yen
($2.60 billion) for the year ending in March 2009, wider than
the 150.11 billion yen loss it posted last business year. TEPCO
announced its full-year business outlook for the first time on
Monday.

It also projected a pretax recurring loss of 425 billion
yen for 2008/09, compared with an average forecast of a 234.6
billion yen loss from 10 analysts polled by Reuters Estimates.

The company forecast an annual dividend of 60 yen, down
from 65 yen last business year.

For its April-June fiscal first quarter, TEPCO posted a net
loss of 76.24 billion yen, compared with a 31.07 billion yen
profit a year earlier.

Kansai, meanwhile, projected a net loss of 55 billion yen
for 2008/09, compared with its April forecast for a 69 billion
yen profit. That would mark its first loss in 29 years.

The Osaka-based company did not change its annual dividend
forecast of 60 yen per share.

Kansai said its fuel purchase costs are expected to top its
initial projections by over 200 billion yen.

The downgrade also comes as the restart of Kansai's
1,180-megawatt Ohi No.3 nuclear generator is set to be delayed
until end-October from the initial schedule of June, boosting
its demand for fuel.

As a result, Kansai now expects to burn 11.06 million
kilolitres of fuel oil equivalent of energy in 2008/09, up from
10 million kl of fuel oil equivalent in its March forecast.

TEPCO ASSUMES NO NUCLEAR PLANT RESTART

TEPCO's outlook is based on the assumption that it will not
restart the Kashiwazaki-Kariwa plant this fiscal year.

The utility said it expected its nuclear power plants to
operate at an average of about 43 percent of capacity in the
year through March, versus 44.9 percent last business year.

That compares with a run rate of 74.2 percent in the year
ended March 2007, before the shutdown of the 8.21 million
kilowatt Kashiwazaki-Kariwa plant, the world's largest nuclear
plant.

Despite lost output from the plant, TEPCO has said it
expects to have enough capacity to meet peak electricity demand
forecast for this summer.

TEPCO received government approval on Monday to use the
900-megawatt Shiobara hydropower plant north of Tokyo between
July 28 and Sept. 12 in case of an emergency power shortage.
That plant had previously been ordered shut by the government
due to improper operations.

It also said it expects to raise its utility bills for an
average household by 12 percent, the sharpest hike ever, from
January to pass on higher prices of oil, liquefied natural gas
(LNG) and coal.

An average household using 290 kilowatt hours of
electricity a month will see an increase of around 800 yen a
month, from the current 6,797 yen, TEPCO said.

The hike assumes a Japan Crude Cocktail (JJC) price, or the
average price of customs-cleared crude oil imports, of $130 a
barrel, in July-September.

The increase comes despite some 270 billion yen worth of
cost cuts over the past two years, TEPCO President Masataka
Shimizu told reporters.

He said the impact of the recent rise in crude oil prices
is "beyond" the level that the company can offset through its
efforts alone.